For retirees in the United States, Social Security benefits are crucial. However, how much retirees keep after taxes varies significantly by state. As more proposals to reduce Social Security taxes emerge, it’s essential for seniors to know how this could impact their finances. Here, we break down the effects by state, with links to helpful resources on retirement planning.
States with Minimal Benefits from Social Security Tax Cuts
1. California
- State Sales Tax: 8.85%
- Median Property Tax Rate: 0.75%
- Estimated Property Tax: $6,017
- Average Social Security Benefits: $1,883
- State Tax on Social Security Benefits: None
- Read more about Medicare coverage for retirees
2. Vermont
- State Sales Tax: 6%
- Median Property Tax Rate: 1.86%
- Estimated Property Tax: $4,340
- Average Social Security Benefits: $1,750
- State Tax on Social Security Benefits: Partial, Income-Based
Check out the latest Social Security changes for 2025
Vermont taxes Social Security income for higher earners, but exemptions for low-income retirees soften the impact. Nonetheless, federal tax cuts would have limited impact here.
3. Colorado
- State Sales Tax: 2.9%
- Median Property Tax Rate: 0.55%
- Estimated Property Tax: $2,800
- Average Social Security Benefits: $1,900
- State Tax on Social Security Benefits: Partial Exemptions
Explore spousal rule changes for Social Security
4. Utah
- State Sales Tax: 4.85%
- Median Property Tax Rate: 0.58%
- Estimated Property Tax: $1,971
- Average Social Security Benefits: $1,840
- State Tax on Social Security Benefits: Full, with Low-Income Credits
How selling a home impacts SSI benefits
5. Connecticut
- State Sales Tax: 6.35%
- Median Property Tax Rate: 2.14%
- Estimated Property Tax: $5,375
- Average Social Security Benefits: $1,865
- State Tax on Social Security Benefits: Partial, Income-Based
Balancing early retirement and Social Security
States with Maximum Benefits from Federal Tax Cuts
1. Florida
- State Sales Tax: 6%
- Median Property Tax Rate: 0.83%
- Estimated Property Tax: $3,034
- Average Social Security Benefits: $1,875
- State Tax on Social Security Benefits: None
Unlocking Social Security benefits for widows
2. Texas
- State Sales Tax: 6.25%
- Median Property Tax Rate: 1.81%
- Estimated Property Tax: $3,599
- Average Social Security Benefits: $1,900
- State Tax on Social Security Benefits: None
Social Security checks up to $4873
3. Nevada
- State Sales Tax: 6.85%
- Median Property Tax Rate: 0.60%
- Estimated Property Tax: $2,415
- Average Social Security Benefits: $1,850
- State Tax on Social Security Benefits: None
Social Security adjustments in 2025
4. Tennessee
- State Sales Tax: 7%
- Median Property Tax Rate: 0.64%
- Estimated Property Tax: $1,498
- Average Social Security Benefits: $1,870
- State Tax on Social Security Benefits: None
Free dental implants for seniors
5. Wyoming
- State Sales Tax: 4%
- Median Property Tax Rate: 0.61%
- Estimated Property Tax: $1,337
- Average Social Security Benefits: $1,860
- State Tax on Social Security Benefits: None
SSI benefit impact for retirees
Conclusion
Knowing which states offer the best tax relief on Social Security is essential for retirees. States like Florida, Texas, and Wyoming maximize savings due to favorable tax policies, while California and Vermont may see limited benefits. Federal tax cuts could offer significant relief in the right locations, so consulting a financial advisor to align your retirement strategy with state tax policies is recommended.
 |